SB843 would have allowed you to participate, whether through a
subscription or fractional ownership, in community-scale solar
projects. In other words, if you wanted to pursue solar power, your
choices would no longer be limited to (a) investing in (or leasing)
solar panels for your rooftop or (b) taking out
federally-subsidized loans totalling hundreds of millions of
dollars to build utility-scale solar plants in the high desert.

All good, but there was an additional and far more important
benefit at stake. The bill would have freed the technology from
having to operate at the margins of the market, where it was
neither efficient nor effective, and instead allow us to find where
it could provide the most value. To understand why this is so
important, consider two things we know about emerging
technologies.

First, any new technology has a sweet spot. A place where the
particulars of the solution (e.g., cost and performance) best
matches the particulars of the problem (customer needs, market
size) and profitable businesses can emerge - attracting yet more
entrepreneurs, innovators, and investors into the field.

The first computers were vacuum-tubed behemoths that were
expensive, required constant care, and only performed relatively
straightforward calculations. Initially, they were only valuable
for large companies (and government operations) that could afford
to buy and maintain them, and that needed to process reams of
relatively simple calculations.

Similarly, the first transistors were expensive and relatively
poor replacements for vacuum tubes, but consumed less power and
could withstand considerably more heat and vibration. The ideal
initial markets? Guidance systems in missiles, then portable
consumer radios.

The first electric lights worked well in small circuits, yet
required either battteries or their own steam engine and dynamo.
The first markets were public areas, like the Brooklyn Bridge and
New York's Central Park, or relatively self-contained place like
ships, hotels, and office buildings.

The second thing we know about emerging technologies is that the
vast majority of their performance
improvements follow rather than spark their
initial market adoption. We know what happened to the computer and
the transistor. Electric lighting had been around, yet barely
changed for nearly 50 years before Edison opened his Pearl Street
Station in 1882. Once Edison proved a profitable business could be
built by tweaking the technology to fit a larger market
opportunity, dramatic innovations followed quickly.

The next decade brought alternating current (for transmission
and use) and new steam turbines (for generation), and more kept
coming. All told, while the basic structure of electric lighting -
from generation to transmission to lighting - has barely changed in
the past century, electric lights are about 100 times more
efficient and, on a cost-per-lumen basis roughly 4,700 times
cheaper now than in 1900. That's because, while the basic structure
of electric lighting has barely changed, countless improvements in
how each element of the system works, and works together, have
combined to produce enormous gains.

So if we want solar power, we need to find its first foothold in
the market, where it can be commercially viable without subsidies
and other transient policy supports. That's difficult while 100
year-old legislation - and intense lobbying by incumbents -
prevents new businesses from pursuing the vast middle ground
between rooftop solar (up to 5 kilowatts) and utility scale (50
megawatts and up), a market large enough to attract investors (like
communities and congregations) to individual ventures, yet small
enough to encourage many ventures to enter and experiment.

Certainly, the devil is in the details and there are many still
to be resolved, not the least of which is ensuring that these
community solar projects don't benefit at the direct cost of other
customers (who must pay to maintain the infrastructure that these
community ventures rely on). But these can and must be fixed.

When it comes to innovation, betting on solar power will have
little effect if we continue to restrict it to the vanity markets,
where rooftop solar competes with kitchen remodels, or the
commodity markets, where utility-scale projects compete with
natural gas plants. Only by opening up the space in between will we
open up the real opportunities for innovation.

Part of Series

Andrew Hargadon is the Charles J. Soderquist Chair in Entrepreneurship and Professor of Technology Management at the Graduate School of Management at University of California, Davis. Hargadon's research focuses on the effective management of innovation, particularly sustainable innovation, and he is author of numerous articles, essays, and the book How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Harvard Business School Press).